Doubt the doomsters: good times are ahead

Article Abstract:

Things are looking for the economy of the UK. Contrary to what pessimists have been crowing about, economic condition in the country are actually on the upswing, with economic growth very similar to the one experienced during the mid-1980s. This recovery, which actually commended in the middle months of 1992, has its roots in two crucial developments. One is the substantial fiscal raise just before the 1992 election. The other is the enormous monetary relaxation, with sterling being devalued by 14% and interest rate reduced from 10% to 5.25%, in 1993. In 1995, consumer demand and rate of manufacturing activity are positive signs that economic renewal is at hand. Consumer spending maintains its growth between 2.5% and 3%. The most hopeful harbinger of good things to come, however, is the commitment of the Conservative government to reduce basic tax rates.

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A very different economic recovery

Article Abstract:

Predictions by many economists that a repeat of the Lawson boom and its consequences in the UK in the late 1980s will happen in 1996 are misplaced. The economic cycle of today is quite different, with the recent economic condition being described simply as disappointing. The disinflation has fostered a very different kind of recovery. The downsizing and cost-cutting measures taken by firms have resulted in the lack of an authentic feel-good factor. Given their sluggish wages and faced with greater uncertainty, consumers are not willing to pay higher prices. Thus, there is little threat of the British economy going into an 'overheated' mode. More investments in infrastructure, education and 'value-added' areas of the economy are needed.

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Quoted UK PLC: an outstanding performer

Article Abstract:

Hoare Govett's fictitious company called Quoted UK PLC is derived from 160 companies comprising 70% of the London equity market and represents the total United Kingdom equity market. According to Quoted UK's annual report, the corporate sector had a 27% increase in earnings per share in 1988 despite a generally slow stock market. Quoted PLC's industrial group had an almost 24% return on capital, an over 10% increase in operating margins, and a cash generation of 76.1 billion pounds sterling. Banks, mechanical engineering, housing and building materials all reported earnings per share increases above the industrial average.

Research, Finance, Stock-exchange, Stock exchanges, Great Britain, Hoare Govett Ltd.

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